Will Future Hackers Be Short-Sellers?

By

(This originally appeared on Rich Tehrani’s Communications & Technology Blog)

 

If you are publicly traded in a country where shorting is allowed – you are a bigger target.

One can’t help but wonder if the opportunity currently exists for hackers to find loopholes in the security of publicly traded companies only to short the stock and then exploit the loophole and do tremendous damage to the company in question. You can’t help but come to such a conclusion when you read about how investors are weighing at least in part – the data breach when sending Sony’s shares lower.

In May, a CNBC headline read: Sony CEO Apologizes for Internet Breaches; Shares Fall and today the Wall Street Journal had a piece titled Sony Investors Skeptical, Sending Shares Down which does make the connection between the breach and the below average share price performance compared to other Japanese companies.

Hacking has gone from something which was done for kicks to a serious enterprise where you can make money from selling credit card numbers and other account information. Now however, it is becoming apparent share prices can be affected by breaches meaning there is yet an entirely new reason to hack into systems.

The Security Ninja blog has some basic research on the correlation between stock performance and security breaches and what it seems to find is, shares do indeed get hit when there is a breach but over time they recover and potentially go up quickly. In other words – if this relationship holds and other factors stay constant it may be possible to short, breach and then buy to cover and buy to hold. Of course a hacker could play options as well.

The bottom line is if you are a private company, you are a target – if you are publicly traded in a country where shorting is allowed – you a bigger target and hopefully the agencies regulating trading are working closely with other arms of law enforcement to bring people to justice quickly if they engage in breaches in-part to benefit from a predicable move in stock price.


Rich Tehrani is CEO of TMC. In addition, he is the Chairman of the world’s best-attended communications conference, INTERNET TELEPHONY Conference & EXPO (ITEXPO). He is also the author of his own communications and technology blog.

Edited by Stefania Viscusi

CEO, Technology Marketing Corporation

SHARE THIS ARTICLE
Related Articles

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More

Oct. 17 Webinar to Address Apache Spark Benefits, Tools

By: Paula Bernier    10/2/2018

In the upcoming webinar "Apache Spark: The New Enterprise Backbone for ETL, Batch and Real-time Streaming," industry experts will offer details on clo…

Read More

It's Black and White: Cybercriminals Are Spending 10x More Than Enterprises to Control, Disrupt and Steal

By: Cynthia S. Artin    9/26/2018

In a stunning new report by Carbon Black, "Hacking, Escalating Attacks and The Role of Threat Hunting" the company revealed that 92% of UK companies s…

Read More

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More